It’s no secret that this time of year deductions are the name of the game. After all, who wants to pay Uncle Sam more than he is entitled to; especially if that means writing a check after having withholdings taken out of your income all year? Because of this, many taxpayers wonder what will qualify as an allowable deduction.
Indeed, some deductions are obvious; such as mortgage interest, capital contributions to a new business and certain child care costs. However, some taxpayers can be a little overzealous in claiming deductions. You don’t want to be known for this, so this post will help in identifying deductions that are doomed to fail.
Entertainment choices– It is true that certain entertainment expenses may be tax deductible. However, throwing a party for a loved one and calling it a marketing expense is ripe for disaster. Entertainment expenses should be clients only.
Sketchy charitable donations – You should know that any entity that has 501c3 status is allowed to accept tax deductible donations. However, paying for a child’s private school tuition does not count as such a donation.
Cosmetic surgeries – Depending on your occupation, looking good may be a prerequisite. However, plastic surgery may not be deductible if it is not related to a health condition that prevents you from working.
Unrelated vehicles – If you use your car or van exclusively for business purposes, the tax code allows for deductions regarding maintenance and repairs. However, if business is not the primary purpose, the vehicle may not be deductible. So golf carts, riding mowers and other vehicle enhancements may not be deductible.